Following the decision to vote 'Leave' from the European Union, Tim Ryan, Executive Chairman at UNA, comments:
"Having taken some time to digest the outcome of the referendum I can say, from a personal point of view, I am deeply concerned about it. In the immediate aftermath of the vote we saw shares across the insurance sector fall heavily in the wake of Britain voting to leave.
However, one of my primary concerns about us leaving the EU is the potential impact this is going to have one inward investment into the UK and the knock on effect this will have on UK businesses. It is sure to lead to instability at a time when the UK economy had steadied itself on a sound footing.
To echo the sentiments proposed by the British Insurance Brokers’ Association prior to the referendum, the existing system of insurance companies ‘passporting’ into the UK could cease, potentially leading to a serious reduction in choice for UK consumers and, in turn, a sharp hike in premiums.
I’m also very concerned about what impact this is going to have on Lloyd’s, London’s insurance market. One of the big attractions to insurers of operating via Lloyd’s is that it has passporting rights into the EU. However, there is a risk now that some insurers who do business there who, after Brexit, may simply shift some of their business to subsidiaries within the EU.
If insurance companies lost the ability to ‘passport’ in and out of the UK, this will damage the ability of brokers to place business on behalf of clients domiciled elsewhere within the EU. UK insurance firms have enjoyed direct access to a single insurance market spanning 28 countries; approximately half a billion people.
Insurers can conduct cross-border business without requiring further authorisation or incurring additional local costs. Now there is a serious risk of losing these benefits. As we now leap into the unknown, all of this will change as we forgo the ability to trade freely under the EU freedom of services provision."